Indel Money, a South India-based non-banking finance company (NBFC), has executed a Pass Through Certificate (PTC) agreement of ₹30 crore with a private sector bank. The agreement was inked in order to expand its gold loan book.

The Kochi-headquartered company has leveraged its one-year gold loan book to facilitate the deal, as well as banks on the growing interest among financial institutions to acquire gold loan portfolios after the onset of Covid-19.

“The deal will help us add more facilities and flexibilities to our gold loan offerings. We are planning to use the fund to expand our loan book,” Indel Money Executive Director and Chief Executive Officer Umesh Mohanan said.

PTC is a certificate issued to an investor against certain mortgaged-backed securities that lie with the issuer, and can be compared with securities such as bonds and debentures, the only difference being that these are issued against underlying securities. The interest paid to the issuer on these securities is in the form of a fixed income.

Kerala-based Muthoot Fincorp has been executing PTCs for the last two years, and has about ₹2,000 crore in volume. The NBFC has been dealing with ICICI Bank and certain mutual funds.

Indel Money has ₹450 crore of assets under management (AUM) as of July 2020, almost double of ₹229.3 crore it recorded in financial year 2018-19. The firm’s gold loan disbursement stood at ₹959 crore in FY 2019-20, compared with ₹538 crore in FY 2018-19.

The firm is looking to increase its AUM to more than ₹1,000 crore in FY 2020-21 and increase its branch network to 425 in FY 2022-23. This would be done by enhancing its presence in Kerala, Karnataka and Tamil Nadu, and expanding operations to Maharashtra, Gujarat, Telangana, Andhra Pradesh and other parts of India, Mohanan added.